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Long-Term Care Insurance: Definition and What LTC Insurance Covers


Long-term care insurance is very essential when it comes to planning for retirement. it provides coverage for services that are not included or covered by other care-related insurance types such as health and disability insurance. Retirement planning refers to paying attention to different possible outcomes. Which majorly includes the need for advanced healthcare services.

Long-term Insurance Care

However, it may seem difficult for you to imagine it now. But there are possibilities that you will need help in taking care of yourself in your old age. Most adults see long-term care services as part of aging. According to the U.S. Department of Health and Human Servicesapproximately 70% of people from 65 years of age and above will need long-term care at a certain point in life.

Moreover, you are working very hard, saving and preparing to live the life you want after retirement. Purchasing long-term care insurance is one way to prepare for retirement. Also, it is best to consider buying LTC insurance while you are still young and healthy, as age and health are factors that affect its rate.

However, in this article we give an overview of the meaning of long-term care insurance, who needs the LTC insurance, how it works, its benefits, various types, best long-term care insurance companies, and other important information pertaining to long-term care insurance.

Understanding Long-Term Care Insurance

Long-term care insurance is usually shortened to LTC or LTCI. It is coverage that offers nursing-home care, home health care, and personal or adult day care for older people or individuals that needs close and steady supervision due to disabling or chronic condition. LTCI is a form of insurance that helps you pay for expenses that come with long-term care.

However, the LTC insurance policy typically covers assisted living and specialized care costs that are generally not covered by health insurance, Medicare, or Medicaid, offering more options and flexibility. Long-term care insurance serves as an alternative to out-of-pocket expenses. This is why most people choose to buy the LTCI policy because expenses from long-term care can rapidly drain one’s savings or that of their family.

Moreover, just like other types of insurance, you will have to pay a premium in exchange for the insurance company’s guarantee to provide coverage for your long-term care costs. Also, just like we said earlier the costs include care services like nursing home services, medical services that are provided in your home, treatment for a chronic disorder such as Alzheimer’s disease, and care given in a hospital.

Who needs LTC insurance and what does it cover?

However, long-term care services are for older people who must meet the LTC insurance policy definition to be eligible for benefits. Which needs a health care provider to certify that the client has lost the ability to carry out at least two out of six of the following activities of daily living (ADLs) listed below on your own without direct or standby assistance.

  • Bathing
  • Caring for incontinence
  • Dressing
  • Eating
  • Toileting (getting on or off the toilet)
  • Transferring (getting in or out of a bed or a chair)

Moreover, you should consider long-term care costs during your financial planning process as you approach retirement age. However, you shouldn’t wait too long to buy the LTC insurance policy as you may not qualify if you have already developed a chronic illness or disability.

Furthermore, the long-term care insurance policy covers a variety of care-related services during an extended illness or disability. The policies cover care services given in a variety of places such as In-home care, adult daycare facilities, assisted living facilities, skilled nursing facilities, Alzheimer’s/specialized care facilities, etc. At home, the policy also covers professional nursing care, housekeeping and cooking/cleaning support, etc.


Benefits or reasons to purchase long-term care insurance

However, most choose to buy long-term insurance for one reason which is: to protect their savings by reducing out-of-pocket expenses. But there are other benefits LTCI can offer:

  • Premiums paid on a long-term care insurance policy may be eligible for an income tax deduction
  • It gives more options for care, choices are limited to nursing homes in other care assistance programs like Medicaid. But long-term care insurance can cover home care, assisted living, adult day care, respite care, hospice care, nursing home, Alzheimer’s facilities, and home modification to accommodate disabilities.
  • Moreover, it also pays for a visiting or live-in caregiver, companion, housekeeper, therapist, or private-duty nurse up to seven days a week, 24 hours a day up to the policy benefit maximum.

Types of LTC insurance policies

LTC insurance policy is private insurance available to anyone who can be able to afford to pay for it. However, there are two types of LTCI that insurance companies offer in the United States. They are as follows:

1. Traditional Long-Term Care Insurance:

These are the most common types of LTCI policies offered. Traditional LTCI offers you options on the kind of care services you can get, and also whether you will be provided with care at home or in a facility. Premiums are paid regularly and if not used, nothing will be returned. But a death benefit will be paid to the beneficiary designated in the policy if the insured dies, and the policy has a return premium rider. Traditional LTCI is the best choice if you are looking for: protection for your income and assets in retirement, most LTC coverage for your dollar, coverage with the broadest set of options.

2. Hybrid or Combination:

Just like the name suggests, it is a combination of life insurance or an annuity with LTC insurance. It also pays a death benefit if there’s no need for long-term care. Moreover, the cost of the premium is guaranteed on hybrid LTC insurance policies and will not increase over time. Just like life insurance, it also offers flexible premium payment options. This means that you can make one lump-sum payment or pay premiums over time.

Health Insurance (Definition): Types and How Health Insurance Works

Best Long-Term Care Insurance Companies

However, you know by now that purchasing an insurance policy is a long-term financial commitment. It is not something you buy that often. Therefore, it is important that you do your research and find the best providers. Which does not only have a good reputation but offers LTCI products at good rates, multiple coverage types, competitive prices with discounts, etc.

However, here’s a list of the best LTCI companies or providers:

Additional Notes

In conclusion, it may be hard for you to imagine long-term care insurance now but it is best to be prepared. However, before making the decision of getting LTC insurance, you first assess your needs and priority. Also, most life policies do cover long-term care. Therefore, you should make an inquiry about whether your or any other insurance policy you currently have does cover these care costs.

Moreover, when choosing an LTCI policy do ensure that you compare several long-term care insurance companies or providers before making a purchase. This is to get details on the policy limits, maximum coverage amounts, and deductibles you can get in our policy.


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